My background in policing showed me that crime prevention works: it is less costly, more effective and, when backed by solid intelligence, it delivers results.
Do we treat due diligence as a financial crime prevention tool, or just a compliance exercise? Too often, compliance professionals say, “I’m not a police officer, that’s not my job”, then go on to bemoan the influx of drugs, criminality and anti-social behaviour that we see on our streets daily.
For me, due diligence is fundamentally about protecting people, not just balance sheets. Done well, it stops illicit money flows, keeps high‑risk partners out of your supply chain, and gives leadership the confidence to walk away from profitable but toxic deals before they explode into headlines, enforcement actions or human harm.
In a world where regulators, media and civil society scrutinise ownership, supply chains and political exposure in real time, credible due diligence has become one of the most powerful tools that companies have to defend their reputations and demonstrate they are serious about fighting financial crime, not just complying on paper.
Globally, the cost of getting this wrong is measured in billions and, in some cases, in lives. The 1MDB scandal, where billions were siphoned from Malaysia’s sovereign wealth fund, led to roughly 2.9 billion dollars in penalties for Goldman Sachs alone and devastated public trust in Malaysian institutions; robust, sceptical enhanced due diligence on politically exposed counterparties and opaque structures could have flagged the corruption risks and pressure‑tested the narrative of “development” proceeds long before investors and citizens paid the price.
The Danske Bank Estonia case, involving an estimated 200 billion euros in suspicious non‑resident flows, shows how weak KYC and a failure to apply enhanced due diligence to high‑risk cross‑border clients can turn a single branch into a major laundering hub, triggering enormous remediation costs and a long‑term trust deficit that no marketing budget can repair.
For businesses that genuinely want to prevent crime, the lesson is that due diligence must be risk‑based, global in outlook and alert to red flags beyond the immediate transaction. Legal sector case studies in the UK show firms being fined for failing to perform adequate due diligence on companies and their principals, with regulators warning that such gaps have the potential to facilitate dubious transactions and money laundering, even where no crime is ultimately proven.
At the same time, financial crime typologies and FIU casebooks highlight how enhanced due diligence, ongoing monitoring and decisive off‑boarding of high‑risk relationships have enabled institutions and FIUs to stop suspicious flows, confiscate stolen assets and prevent further victimisation, clear evidence that rigorous, well‑designed due diligence does not just document risk for the file, it actively disrupts criminal activity.
Prevention works. It is better than cure.
Colin Tansley is a former UK police officer and specialist investigator who now helps organisations use due diligence as a proactive crime prevention tool, not just a compliance tick‑box. He works with clients to strengthen their decision‑making, protect reputations and disrupt financial crime by turning open‑source intelligence and risk insights into practical, defensible actions.
